Arkansas LLC
Limited liability companies can be a great vehicle for entrepreneurs in Arkansas. Learn how to form an LLC in the state and how to maintain it once it's established.
$45
Formation fees
$22.5
Name reservation fees
$150
Annual report fees
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StartGlobal: Legal + Taxes + Bookkeeping for solopreneurs
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What is an LLC?
Limited Liability Company
LLC is a business entity in the U.S that provides limited liability to its members. It has characteristics from both corporation and sole proprietorship. LLCs are permitted under State statutes of each US state.
Limited liability
Personal assets are protected for people with limited liability when they are sued.
Corporation
A business entity that can issue shares and give limited liability to shareholders.
Members
Owners of an LLC are referred to as members. They own membership interest in the LLC.
Sole proprietorship
Where an individual engages in business activity without formal organization.
Types of LLC
Depends on the number of members and whether it has elected to change its IRS classification.
Single-member LLC
Has only a single member. IRS considers it as a sole proprietorship for tax purposes.
LLC as C-corp
Owners of an LLC are referred to as members. They own membership interest in the LLC.
Multi-member LLC
Has two members. IRS considers it as a partnership for tax purposes.
LLC as S-corp
A special election for a maximum of 100 US shareholders.
Actions
Here are some common actions in a Arkansas LLC. Click on any of the actions below to read the steps:
How to form an LLC in Arkansas?
Follow these 7 steps:
1. Name your LLC
Pick out a few names for your business that you think your customers would find appealing. Ask a few friends and some customers what they think of those names. If you already have a name in mind, great!
To check if those names are available in the state of Arkansas, go to the official entity search tool on the Secretary of State website. It’s free to search.
After you reserve a name for your business, your reservation will be valid for a specified period of time. If you file your Articles of Organization with your state's Secretary of State, you do not need to reserve a name separately.
Reservation fees
$45
Reservation duration
48 hours
LLC’s are required to have a designator in their name. You can use ‘Limited Liability Company’, ‘LLC’, or ‘L.L.C’
Make sure you follow LLC naming guidelines specified by Arkansas state as per AC §4-32-103. This includes not using names similar to existing companies, etc.
2. Get a mailing address
If you have a factory or office in Arkansas, that can be your official corporate address. You may also use your home address, if desired.
You can also pick a virtual office address. This way, you pay a company for a street address and they handle all your mailing.
3. Hire a registered agent
If you are a resident of Arkansas and want to be the registered agent for your LLC, you can do that. However, your name and address will be made public, and you must be available during all business hours to receive service of process.
If you don't want to go through the trouble of maintaining your own corporate address, then there are companies that provide registered agent services. These companies handle a corporation's legal needs, including its address, on a fee basis.
4. File Articles of Organization
Once you have registered your business with the state and obtained an official office address, you can file it online on the Arkansas SOS Corporations Online Filing System website.
Filing fees
$45
Processing time
48 hours
Address
Arkansas Secretary of State
1401 W. Capital Ave.
Suite 250
Little Rock, AR 72201
5. Create an Operating Agreement
Operating agreements are not mandatory in Arkansas, but you should consider creating one. There are online websites where you can create an operating agreement and get it signed by all LLC members.
6. Get Employer Identification Number (EIN)
The IRS uses an Employer Identification Number (EIN) to identify businesses. You can create an EIN for free at the IRS website.
7. Open a business bank account
When you run a business, it's important to separate your personal and business finances. There are several ways to set up a business bank account. You can open a business checking account at a traditional bank like Chase or Wells Fargo, for example. Or you can use one of the many modern banking options that offer plenty of benefits to small businesses.
Entity name
Every LLC should have a unique name in Arkansas. Arkansas maintains a list of names of entities in the state. Go through it to check if your chosen name is available.
Search for names
Go to the official website of the Arkansas business entity search tool to see if the name you want is available.
Searching fee
Free
Reservation
You can reserve a name for your LLC for a specific duration by paying reservation fees to the Arkansas business & commercial services. You will have to file your LLC formation documents within this period to keep the name. Alternatively, you can directly go ahead with the LLC formation without any reservation. That's fine too.
Reservation fee
$23
Reservation period
120 days
LLC naming guidelines
The name you choose for your LLC must the official naming guidelines.
AC §4-32-103
Visit
Here are some of the guidelines in simple language:
- 1
Must contain the words "Limited Liability Company" or "Limited Company" or the abbreviations "L.L.C.," "L.C.," "LLC," or "LC." The word "Limited" may be abbreviated as "Ltd." and the word "Company" may be abbreviated as "Co."
- 2
Don’t include terms that indicate that you are doing an activity that you are not authorised to do.
- 3
Your name should be ‘distinguishable’ in the Secretary of State records. Adding a punctuation or ‘the’ does not make it distinguishable.
- 4
Don’t use words that makes it seems like you are a governmental entity or has an affiliation.
Articles of Organization
In Arkansas, Articles of Organization is the form you file with the Secretary of State to form an LLC. It contains the articles of formation for the LLC.
Filing Articles of Organization
There are a couple of ways to file
File it online on Arkansas SOS Corporations Online Filing System website
Visit
Mail a form to the state department
PDF
Address
Arkansas Secretary of State
1401 W. Capital Ave.
Suite 250
Little Rock, AR 72201
Online fee
$45
Online processing time
48 hours
Mailing fee
$45
Mail processing time
14 days
EIN
An Employer Identification Number, also known as Federal Tax Identification Number, is used to identify a business entity.
Who must have an EIN?
Single member LLC elected to be taxed as C-corp or S-corp
Single member LLC with an employee
All multi-member LLC
Registered agent
A registered agent is an agent of your LLC on whom any notice, process or demand may be served. Every LLC in Arkansas needs to have a registered agent located in the state.
Requirements
According to Arkansas Code § 4-20-101 - § 4-20-118:
- 1
Registered agent can be an individual or an authorised organisation.
- 2
Registered agent must have a street address where they can personally receive service of process.
- 3
Office of Registered agent cannot be just a mailbox service of a telephone answering service.
LLC Annual Franchise Tax Report
Every LLC has to file this report in Arkansas to stay compliant with the state laws.
Filing Annual Franchise Tax Report
Arkansas LLC is expected to file this report annually by may 1
File it online on Department of Finance and Administration, Arkansas Secretary of State website
Visit
Mail a form to Department of Finance and Administration, Arkansas Secretary of State website
PDF
Address
Arkansas Secretary of State
1401 W. Capital Ave.
Suite 250
Little Rock, AR 72201
Online fee
$155
Online processing time
1-2 weeks
Mailing fee
$150
Mail processing time
1-2 weeks
Failure to pay
There is a penalty fee of $25 plus an interest calculation on the form
Note
It is $150 +$5 fee to file online. The fee is actually annual franchise tax.
Operating agreement
Operating agreement is an internal business document that outlines the general rules and policies of the LLC.
Importance
It is not a legally mandatory document. However, it is recommended to have one since many courts, banks and financial institutions use it for verification. It is also nice to clearly outline the duties and relations between multiple members of an LLC—so you avoid any confusion in the future.
Format
There is no ‘required’ format for an operating agreement. You can include anything reasonable in it. In general, it has the following sections:
Basic Business information
Contains name, address, names and details of members, purpose
Member relationship
Contains membership interest, decision making process, powers, duties.
Membership transfer
Contains details on how to add or remove members and managers.
Accounting and tax
Contains details on how company records and distributions are maintained.
Dissolution
How to dissolve, wind up and terminate, due process to follow and exceptions.
LLC in Arkansas
Although many businesses in Arkansas choose LLCs, numerous other business entities are available to entrepreneurs in Arkansas.
Arkansas Business search
Arkansas LLC add member
Arkansas LLC remove member
Page sponsorWhy we like StartGlobal?
My genuine thoughts
Willy Justin
Founder, Statepedia
StartGlobal: Legal + Taxes + Bookkeeping for solopreneurs
Product
For small businesses, managing taxes, accounting and everything legal is just a pain. Nobody wants to do it, but they have to. Instead of working with CPAs, attorneys and others separately, Start brings all of them under a single subscription. It’s just smooth.
Team
I know the team behind StartGlobal very well. It’s a very hardworking group of individuals who are genuinely passionate about small businesses. They are backed by successful founders like Balaji Srinivasan, Biz Stone(Twitter) and others.
Price
Getting a CPA or attorney is a matter of thousands of dollars. It’s just unfair to pay so much when you’re a small business. Start has a single subscription that covers it all. It is a definite money saver.
$599 one-time